OFFLABEL MARKETING

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OFF-LABEL MARKETING THE FALSE CLAIMS ACT

• THOMAS M. GREENE
• Greene Hoffman

November 17, 2004
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THOMAS M. GREENE

• Partner of Greene Hoffman
• Lead counsel in Franklin v. Pfizer

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FRANKLIN V. PFIZER
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WHO IS DAVID FRANKLIN?

• Ph.D. in biology
• Hired by Warner-Lambert as a medical liaison 1996
• Witnessed off-label marketing and kickbacks
• Uncomfortable placing sales over science
• Worried that he would be made a scapegoat
• Left Warner-Lambert after 4 months
• Filed lawsuit under False Claims Act (FCA)

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GLOBAL SETTLEMENT

• Warner-Lambert pled guilty to two counts of
  violating the Food Drug Cosmetic Act
• Warner-Lambert paid 430 million
• -152 million to settle federal civil False
  Claims Act liabilities
• -38 million to settle its state civil
  liabilities to the fifty sates and fund
  remediation program
• -240 million federal criminal fine
• Relators share 26.6 million
• Corporate Integrity Agreement

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WHAT DR. FRANKLIN HEARD

• Medical affairs supervisor When we get out
  there, we want to kick some ass on Neurontin, we
  want to sell Neurontin on pain. All right? And
  monotherapy and everything we can talk about,
  thats what we want to do (Voicemail 1-2)

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WHAT DR. FRANKLIN HEARD

• Director of sales I want you out there every
  day selling NeurontinWe all know that
  Neurontins not growing for adjunctive therapy,
  besides thats not where the money is. Pain
  management, now thats money. Monotherapy,
  thats moneyNeurontin for pain, Neurontin for
  monotherapy, Neurontin for bipolar, Neurontin for
  everythingI dont want to see a single patient
  coming off Neurontin before theyve been up to at
  least 4800 mg/day. I dont want to hear that
  safety crap either (Disclosure at 11)

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WHAT DR. FRANKLIN HEARD

• Human resources director Make sure you sell
  yourself, remember this is a sales position,
  youve got to be aggressive (Disclosure at 12)
• Director of sales If we are going to market
  Neurontin effectively, we have to do it for
  monotherapyalso for pain and bipolar and other
  psychiatric uses. And, now, you know, that is a
  labeling issue (Voicemail at 1-23 1-24)

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WHAT DR. FRANKLIN HEARD

• Medical liaison I just completed a neurology
  preceptorship with a physician in YonkersThe
  structure, basically, was that the doctor would
  review the chart of each patient with me in a
  one-on-one fashion. Then we would go meet the
  patient. The patient would be examined, and
  then, while the patient was dressing, the doctor
  and I, one-on-one, would discuss the patient and
  therapeutic optionsTwo prescriptions were
  generated todayI felt that I influenced the
  physician to the need of titrating upThe second
  situation was a 65-year-old man who has neuralgia
  in all of his limbsAnd the patient, you know,
  basically agreed to give the drug a try
  (Voicemail at 1-155 1-159)

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WHAT DR. FRANKLIN HEARD

• Director of sales But, gee, just think of how
  we could expand the market here with Neurontin
  and some of these other disorders. So, I guess
  the sky is the limit, right? (Voicemail at 1-59
  1-60)

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WHAT IS THE FALSE CLAIMS ACT (FCA)?

• A primary tool of government to fight fraud
• Enacted in 1863 in response to unscrupulous
  profiteering during Civil War
• Broad remedial statute intended to reach all
  types of fraud
• Relators share 15 - 30
• Original source
• Protection against retaliation

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WHAT IS THE FALSE CLAIMS ACT (FCA)?

• Imposes liability for any person who
• Knowingly presents, or causes to be presented, to
  the United States Government a false or
  fraudulent claim for payment or approval or
• Knowingly makes, uses, or causes to be made or
  used, a false record or statement to get a false
  or fraudulent claim paid or approved by the
  Government
• In addition to federal FCA, 12 states now have
  state false claims laws

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MEDICAID FALSE CLAIMS

• Medicaid reimbursement
• -Prescription ? Pharmacy ? Medicaid
• -Blend of federal and state funds
• With limited exceptions, off-label uses are not
  covered by Medicaid and are not eligible for
  reimbursement

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OFF-LABEL PROMOTION

• In general, doctors may prescribe a drug for
  unapproved uses
• In general, manufacturers may not promote
  unapproved uses.
• Benefits some off-label uses are scientifically
  valid and provide tremendous benefits to
  patients, especially in areas of life-saving
  drugs
• Risks no guarantee of scientific validity
  unknown health risks waste of public resources
  certain side effects not justified

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OFF-LABEL PROMOTION

• Profit motive
• -Clinical trials costly
• -Off-label sales can be significant
• -These factors can affect corporate judgment
• Off-label promotion relies on covert marketing
  techniques
• Before 1997, FDA allowed dissemination of
  information about off-label uses only when such
  information was solicited by the physician

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NEURONTIN
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NEURONTIN

• APPROVED INDICATION (between 1994 2001)

Neurontin (gabapentin) is indicated as
adjunctive therapy in the treatment of partial
seizures with and without secondary
generalization in adults with epilepsy, at doses
ranging between 900 mg to 1800 mg per day
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NEURONTIN

• UNAPPROVED INDICATIONS

Alcohol Detoxification Amyotrophic Lateral
Sclerosis Antidepressant-Induced Bruxism
Anxiety Disorder Panic Disorder OCD Behavior
Problems - Dementia-Related Bipolar Disorder
Mania Borderline Personality Disorder
Brachioradial Pruritus Central Nervous System
Disorders Charles Bonnet Syndrome Ciguatera
Poisoning Cluster Headache Cocaine Dependency
Dystonia Essential Tremor Failed Back Surgery
Syndrome Glossodynia Sensory Deficits
Headache (SUNCT) Migraine Prophylaxis Multiple
Sclerosis Complications Myalgias - Taxane
Induced Neuropathic Cancer Pain Neuropathic
Pain Syndromes Neuropathy - HIV-Related
Nicotine Withdrawal Nystagmus Orthostatic
Tremor Pain - Postpoliomyelitis Pain Pain -
Reflex Sympathetic Dystrophy Partial Seizures -
Monotherapy Phantom Limb Syndrome Restless Legs
Syndrome Dosages Exceeding 1800 Mg Social
Phobia Spasticity
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HOW DO YOU PROVE FALSE CLAIMS?
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WHAT IS THE EVIDENCE?

• Voicemail recordings
• Internal documents
• Vendor documents
• Data (IMS, Scott-Levin, Verispan, Medicaid)
• Witnesses (Sales people, doctors)
• Patent applications

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PARKE-DAVISS MARKETING STRATEGY

• Decision not to seek regulatory approval for
  off-label uses, but market the uses anyway
• Publication strategydisseminate articles
  describing off-label use to create a drum beat
  in the literature
• Marketing Assessments

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PARKE-DAVISS MARKETING STRATEGY

• Neuropathic pain spasticity
• results of exploratory trials, if positive,
  will be publicizedbut there is no intention to
  fully develop the indication
• Psychiatric uses
• due to lack of scientific rationaleit is
  recommended to implement only an exploratory
  trialwith the results highlighted through
  peer-reviewed publication

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PARKE-DAVISS MARKETING STRATEGY

• Migraine prophylaxis
• -The decision is to conduct only publication
  study(ies)
• -There is no established pre-clinical rationale
  that would support the use in migraine
  prophylaxis
• -A 12 week migraine prophylaxis studyrevealed
  no statistically significant difference between
  placebo and Neurontin

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PARKE-DAVISS MARKETING STRATEGY

• Neurontin Indication Decision Analysis Group
  positive return on investment for publication
  strategy
• Neurontin Development Team Meeting Minutes
  coordinated marketing, regulatory, patent and
  clinical research activities
• Advertising and promotion budgets

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PARKE-DAVISS MARKETING TACTICS

• Medical Liaisons
• Consultant and advisory board meetings
• CMEs
• Dinner meetings and teleconferences
• Preceptorships

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PARKE-DAVISS MARKETING TACTICS

• Payments to physicians ( 50 million to 3,000
  physicians)
• -Grants
• -Speaker fees
• -Honoraria
• -Paid vacations
• -Olympics tickets
• Ghostwritten articles
• Suppress negative information

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MARKETING MESSAGE

• False and misleading statements
• -Pain
• -Psychiatric uses
• -Migraines
• -Monotherapy
• -Dosages above 1800 mg
• -Lack of side effects

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MARKETING MESSAGE

• Examples
• -Now approved for monotherapy
• -Good for back pain
• -Effective treatment of bipolar
• -Failure to disclose negative trials for migraine
  and bipolar
• -Clinical usage requires daily dosages of
  2200, 3200, 3600 mg

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PATENT APPLICATIONS

• US Patent 5,084,479 neuro-degenerative
  diseases (1990)
• US Patent 5,510,381 mania and bipolar disorder
  (1995)
• US Patent 5,792,796 anxiety and panic (1995)
• US Patent 6,242,488 pain (2000)
• US Patent 6,426,368 alcoholism (2001)

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RESULTS

• Initial estimate for lifetime sales of Neurontin
  was 500 million
• Off-label marketing was successful in 2003 use
  of Neurontin for unapproved uses accounted for
  nearly 90 of its sales
• Sales of Neurontin now exceed 2 billion annually

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RESULTS
PAIN (NEURONTIN V. DILANTIN)
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RESULTS
PSYCHIATRIC (NEURONTIN V. DILANTIN)
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RESULTS
MIGRAINE (NEURONTIN V. DILANTIN)
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RESULTS
MEDICAID EXPENDITURES FOR OFF-LABEL NEURONTIN
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LEGAL DISCUSSION
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MEDICAID FALSE CLAIMS

• Motion to dismiss United States ex rel. Franklin
  v. Parke-Davis, Division of Warner-Lambert, 147
  F. Supp. 2d 39 (D. Mass. 2001)
• Motion for summary judgment United States ex
  rel. Franklin v. Pfizer et al., No. 96-11651-PBS,
  2003 U.S. Dist. LEXIS 15754, (D. Mass. Aug. 22,
  2003)

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MEDICAID FALSE CLAIMS

• Submission of ineligible claim is false claim
• The only issue is whether Parke-Davis caused to
  be presented a false claim, and 3729 does not
  require that the cause be fraudulent or
  otherwise independently unlawful (2003 U.S.
  Dist. LEXIS 15754, 6)

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MEDICAID FALSE CLAIMS

• Court holds that Relator has presented evidence
  showing that it was foreseeable that
  Parke-Davis's conduct (including non-fraudulent
  promotion of off-label Neurontin uses) would
  ineluctably result in false Medicaid claims
  (2003 U.S. Dist. LEXIS 15754, 15)

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MEDICAID FALSE CLAIMS

• Court also recognized that kickbacks could form
  independent cause of action (2003 U.S. Dist.
  LEXIS 15754, 19-20)

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FUTURE OFF-LABEL CASES

• Even covert off-label marketing and kickbacks can
  be detected
• DOJ will prosecute for off-label promotion
• Whistleblower cases are a primary way that
  evidence of off-label promotion is brought to
  government attention

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FOOD AND DRUG ADMINISTRATION MODERNIZATION ACT
(FDAMA)

• In 1997, Congress passed FDAMA allowing
  manufacturers to disseminate information about
  off-label uses to health care providers under
  certain circumstances
• FDAMA purports to liberalize the dissemination of
  information regarding off-label use to health
  care professionals, but the requirements for
  legally disseminating such information are
  burdensome

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FOOD AND DRUG ADMINISTRATION MODERNIZATION ACT
(FDAMA)

• FDAMA requirements
• - Submit an application to the FDA seeking
  approval of the off label use or certify that one
  will be filed
• - Submit a copy of the information to the FDA in
  advance prior to dissemination
• - Materials must be unabridged
• - Materials must prominently state that they
  pertain to unapproved uses, disclose whether
  authors received compensation from company and
  give bibliography of other scientific articles
  about the off-label use
• - Information must be peer-reviewed or
  scientifically sound
• - Information cant be false or misleading
• - Submit semiannually a list to FDA of the
  articles disseminated

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WASHINGTON LEGAL FOUNDATION CHALLENGES FDA
RESTRICTIONS

• Washington Legal Foundation (WLF) cases
• WLF I WLF challenged FDA guidances that preceded
  FDAMA regarding enduring materials and CMEs
  arguing restrictions violate First Amendment free
  speech provisions. Court held that the guidances
  regarding enduring materials and CME guidances
  restricted speech more than necessary. (Court
  recognizes FDA could enforce rules and
  regulations regarding the dissemination of
  information that was false or misleading and
  require manufacturers to disclose their financial
  support or involvement in any of the disseminated
  materials)

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WASHINGTON LEGAL FOUNDATION CHALLENGES FDA
RESTRICTIONS

• WLF II WLF challenged FDAMA provisions on same
  grounds as it challenged FDA guidances. Court
  held FDAMA provisions were unconstitutional and
  infringed on manufacturers rights to disseminate
  information about off-label uses. District court
  enjoined FDA from enforcing FDAMA provisions

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WASHINGTON LEGAL FOUNDATION CHALLENGES FDA
RESTRICTIONS

• WLF III Appeals court vacates injunction of
  lower court, because FDA argued that neither
  FDAMA nor the CME guidance authorize the FDA to
  prohibit or sanction speech but were merely FDA
  interpretations, thus eliminating the controversy
  about the constitutionality of FDAMA
• WLF IV WLF seeks clarification of its position
  and status of courts order court laments after
  six years worth of briefs, motions, opinions,
  Congressional acts, more opinions, issue remains
  100 unresolved leaving drug manufacturers
  still without clear guidance as to their
  permissible conduct

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SUMMARY

• FDAMA and WLF rulings neither expand off-label
  marketing opportunities nor diminish the FDAs
  power to regulate and enforce the dissemination
  of any information that is false or misleading
• The conclusion that off-label promotion merits
  First Amendment protection is limited at best

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SUMMARY

• While FDAMA offers safe harbor provisions for
  manufacturers seeking to disseminate truthful
  information, these provisions have burdensome
  compliance requirements
• Pharmaceutical manufacturers should be aware of
  the potential for off-label promotion to trigger
  claims under the False Claims Act

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SUMMARY

• Even truthful off-label promotion could be
  grounds for a claim under the FCA, if the
  pharmaceutical manufacturer was aware that its
  actions would cause the submission of ineligible
  Medicaid claims
• The law and industry guidelines must prevent
  industry marketing efforts from interfering with
  the trustworthiness of the medical profession
• The FDA continues to play an important role in
  monitoring off-label promotion and the
  interaction between the industry and healthcare
  professionals

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SUMMARY

• Physicians should have access to the most recent
  information in order to provide the best care
  possible to their patients. But doctors must be
  able to rely on the information they receive from
  manufacturers, without suspicion that marketing
  goals are more important than the delivery of
  safe and effective medicine

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RELATED PRESS ARTICLES
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RELATED PRESS ARTICLES

• Melody Peterson, Whistle-Blower Says Company
  Broke the Rules to Push a Drug, The New York
  Times, 3/14/2002
• Rachel Zimmerman, A Unit of Pfizer Is Target of
  Lawsuit Over Its Marketing, The Wall Street
  Journal, 3/15/2002
• Neurontin (GABAPENTIN) --The Illegal Corporate
  Creation of a Blockbuster Drug, Public Citizen's
  eLetter, 05/02
• Melody Peterson, Suit Says Company Promoted Drug
  in Exam Rooms, The New York Times, 5/15/2002

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RELATED PRESS ARTICLES

• Liz Kowalczyk, Drug company push on doctors
  disclosed, The Boston Globe, 5/19/2002
• Liz Kowalczyk, Pfizer drug strategy probed
  States question marketing tactics for Neurontin,
  The Boston Globe, 10/18/2002
• Liz Kowalczyk, Neurontin marketing plan
  disclosed Drug maker hired 3 firms to promote
  unapproved uses, The Boston Globe, 11/8/2002
• Rachel Zimmerman, "Ad Agency Helped Push
  Neurontin, Documents Show", The Wall Street
  Journal, 11/8/2002

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RELATED PRESS ARTICLES

• Liz Kowalczyk, Use of drug soars despite
  controversy Neurontin maker faces probes into
  marketing, The Boston Globe, 11/25/2002
• David Armstrong and Charles Forelle, Executives
  May Have Broken Off-Label Rules on Neurontin
  Newly Released Documents Show Committee Approved
  Plans to Publicize Unapproved ,The Wall Street
  Journal, 12/20/2002
• Melody Peterson, Memos Cast Shadow on Drug's
  Promotion Plan to Market Epilepsy Medicine for
  Other Uses Is Detailed, The New York Times,
  12/20/2002

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RELATED PRESS ARTICLES

• Snigdha Prakash, "The Selling of Neurontin
  Lawsuit Questions How Drugs are Promoted,
  Prescribed", National Public Radio, 1/16/2003
• Liz Kowalczyk, Whistle-blower tells of 'illegal'
  tactics Says drug firm taught deception, The
  Boston Globe, 3/12/2003
• Melody Peterson, Doctor Explains Why He Blew the
  Whistle, The New York Times, 3/12/2003
• Justice Backs Whistleblower In Neurontin
  Marketing Case, FDAnews.com Pharmaceutical
  Corporate Compliance Report, 6/3/2003

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RELATED PRESS ARTICLES

• Dateline NBC, Drug Giant Accused of False Claims,
  MSNNBC.com/news, 7/11/2003
• Snigdha Prakash, Pfizer Fined 430 Million for
  Illegal Drug Marketing, National Public Radio,
  5/13/2004
• Jayne O'Donnell, "26.6M won't change me,
  whistle-blower says", USA Today, 5/14/2004
• Gardiner Harris, Pfizer to pay430 Million Over
  Promoting Drug to Doctors, The New York Times,
  5/14/2004

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RELATED PRESS ARTICLES

• David Armstrong and Anna Wilde Mathews, Pfizer
  Case Signals Tougher Action on Off-Label Drug
  Use, The Wall Street Journal, 5/14/2004
• Liz Kowalczyk, Pfizer Unit Agrees to 430m in
  Fines, The Boston Globe, 5/14/2004

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THOMAS M. GREENE, ESQ 125 Summer Street, Suite
1410 - Boston, MA 02110 Phone (617)
261-0040Fax [phone]tgreene_at_greenehoffman
.com